Last month, TRENDS reported on Kuwait’s imploding financial market and pointed to the likely further implosion of its parliament. Sadly that proved to be true as the Emir, Sabah al-Ahmed al-Sabah, dissolved parliament.

The main battle is between the executive branch of government, the senior ministers and prime minister, all of whom come from the ruling al-Sabah dynasty, and political factions in parliament. The previous deadlock over the rescue package, which is still under consideration, continues with calls to interrogate prime minister Sheikh Nasser Mohammed al-Sabah over matters ranging from the dealings of his personal office, to the demolition of a makeshift mosque without due process. As the prime minister also happens to be the nephew of the Emir, however, this isn’t something that’s likely to occur.

But the dissolution may help the government implement the $5.17 billion fiscal stimulus package for the country’s crippled banking industry, since the cabinet can now proceed with the deal un-fettered. Yet the economic situation continues to worsen. Moody’s has announ- ced that the sovereign creditworthiness of Kuwait is likely to be downgraded.

“We discern a deteriorating trend in government effectiveness, exemplified by the repeated changes of government and parliament,” says Tristan Cooper, vice president and senior analyst with Moody’s sovereign risk unit. “It is the accumulation of such disruptive political events, rather than this event in particular, which is concerning.”

As the first and only Gulf state with a democratic structure, this is sadly not a new phenomenon for Kuwait. The state has seen two previous suspensions of the constitution by the Emir – in Aug. 29, 1976 and July 3, 1986. Yet this cycle of political turmoil seems to happen with disturbing regularity once every decade.

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